Saturday, 26 June 2021 15:54

Rise in prices of basic food basket affects the economy of salvadoran families

Written by Alondra Gutiérrez

The executive director of the Centro para la Defensoría del Consumidor (CDC) Danilo Perez, during a television interview, he addressed the issue of the increase in prices of the basic food basket and how it affects the economy of salvadoran families.

The director argued that the increase in prices is due to various seasonal factors due to the time of year, secondly, he said the impact of fuel prices, he added in third reason influences the little support to agriculture, he said that the country is still dependent on imports of fruits and vegetables.

"As there is not an adequate production of national products, they are being imported, which makes the products more expensive", said Danilo Perez, executive director of the CDC.

In addition, he mentioned that among the prices that have increased are oil and disposable products, as well as basic necessities, which represents an upward scale in prices.

Pedro Argumedo, researcher of the Department of Economic Studies (FUSADES), commented that globally there is an acceleration of inflation, which is the highest in the last five recessions.

He added, that food inflation is going to increase among which stands out the price of producers in raw material has risen 25% to april 2021, which shows that this increase in raw material will move in the next six, which represents that inflation pressure will be present in the course of the year this due to the increase in the price of producers.

He pointed out, that the price of transportation is two to three times more, which presents a strong increase, he added that the prices of food products shot up by 47% from their lowest point in april last year, which represents a 50% increase in world food prices since april last year.

"Soybean prices have increased by 86%, in the case of corn it has increased by 111% from may 2020 to may 2021".

Among the increase in vegetables stands out the medium green güisquil for may 14 the bag of 50 units of US$6 dollars and for june 14 a price of US$16 which represents an increase of 166%, also the increase in the medium paste tomato for the box of 325 to 350 units cost in the same period US$5.80 now costs US$12.80. This increase has affected other vegetables and fruits.

Among the factors affecting inflation are the following:

  • World demand has increased
  • Problem in the break in supply chains: raw materials are not reaching most of the world, which limits production and creates shortages, and in the face of shortages, price increases are generated.

"After every recession there is always an increase in prices, but globally there is an acceleration of prices that is much higher in the last recessions, what is expected is that global inflation will continue to increase over the course of the year, well above what has been defined as inflation targets, the increase in prices in developing countries as there are millions of people who have been left in poverty and the increase in food", said Pedro Argumedo, researcher at FUSADES.

He concluded that the increase in prices is likely to be seen in the coming months due to the various problems among which stand out: demand, logistics and transportation.